Public pessimistic about future of state pension

By Theo Andrew07/01/19

The public are "pessimistic" about the future of state pensions, with all age groups anticipating a low state pension and an increase in the state pension age by the time they hit retirement, Canada Life has revealed.

The survey, which questioned 1,005 people ages 18-55, found that on average people think the state pension age will be 70 by the time they can claim it, with 32 per cent believing it will provide a “negligible” income.

Furthermore, one in seven respondents believe that the state pension won’t exist by the time they retire, going up to one in five of 18-24 year olds.

Canada Life technical director, Andrew Tully, said: “While people broadly think the state pension will still exist in some form when they retire, it’s striking how many people, especially younger generations, have little confidence it will be there at all by the time they retire.

“Our research suggests people are being pretty pragmatic and are not banking on the state pension to support them in retirement.”

Currently, the state pension provides £164 a week, however, women said they expect to receive £143 a week when they retire, while men expect a weekly pension of £161. One in five expect a state pension of more than £200 a week.

According to the survey, 65 per cent of people think they will contribute more than they will receive, with 53 per cent feeling the current system isn’t fair.

Those aged 18-14 feel the state pension will make up around 27 per cent of their retirement income, compared to an average of 42 per cent among other age groups.

Tully added: “People appear to be ‘pricing in’ low expectations of the state pension that will be waiting for them when they retire, most likely because they see successive governments continually moving the goal posts, often with good reason.

“The success of auto-enrolment will hopefully begin to bridge the retirement savings gap, as people take control and appear to be moving away from a reliance on state provision. After all, private pension savings are one of the best protections against whatever decisions future governments may take on state provision.”

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